£70m refinancing for housing group to fund corporate plan ambitions

Published on: Friday, 21st January 2022
Mike Stevenson and Ian Skipp from Futures Housing Group

East Midlands-based housing association, Futures Housing Group, has successfully issued a £70m tap issuance of its 2044 bond. The 10,300 home landlord will use the funds to help deliver its ambitious plans which include building more new homes across the region as well as investing in the energy performance of existing homes.

The timing of the bond issue was chosen to take advantage of favourable market rates. It was priced on 17th January and achieved a yield of 2.310%, reflecting a spread of 95 basis points over the benchmark government gilt rate. This follows on from Futures’ successful prior bond issuances in both 2019 and 2020 and builds the existing 3.375% 2044 bond to benchmark size.

There was exceptional support for the bond. Demand was almost three times oversubscribed from a range of highly rated investors who were impressed by the strength of Futures’ business plan, its strong resilience in face of the external pressures over the last two years and the high ratings from the Regulator of Social Housing (G1/V1, December 2021) and S&P credit rating agency (A+ (stable outlook) October 2021).

A markets arm of a national bank acted as sole bookrunner, supported by relevant legal representation.

Mike Stevenson, Group Chair at Futures said: “We take pride in being a well-run and progressive organisation so it was fantastic to see this recognised in the very strong demand from lenders to invest in us and our plans. This, together with the recent external ratings from S&P and the regulator, show that we are going from strength to strength. There is still so much we want to do to help support local communities so this extra investment will allow us to keep forging ahead.” 

Ian Skipp, Group Finance & Resources Director at Futures, added: “This long term financing not only delivers competitively priced long term debt, it also allows us to plan with more certainty to improve our customers’ homes, build more new homes and support communities to be more self-sufficient and resilient. This latest financing forms part of a longer term financial strategy linked to our strategic ambition to deliver a sector leading, value for money service."

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